Foreclosure scammers (oops! I meant 'consultants') take note. . . and boo! hiss! on CAR

June 30, 9:24 PMSF Real Estate ExaminerCece Blase

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(Courtesy of the Press Enterprise, Sacramento Bureau):

Foreclosure consultants have until the end of the month to register with the state under a new California law meant to deter foreclosure fraud.  Critics contend that some consumers are being ripped off. Distressed homeowners facing foreclosure make up-front payments to firms promising to work with their lenders to stop foreclosure sales, only to lose the money and their homes when the foreclosures go through.

Scott Gerber, a spokesman for California Attorney General Jerry Brown, said the office has received more than 600 complaints about foreclosure consultants.

Brown's office announced Monday that foreclosure consultants have to register with the department and post a $100,000 bond by July 1. Those failing to register face fines of up to $25,000 and a year in jail.

"If they haven't signed up, the consumers should be very wary of working with that person," Brown spokesman Scott Gerber said. "We also think this sends a strong message to those working in this industry: Sign up, register with our office, submit yourself to scrutiny, or else be in violation of the law."

The rule stems from state legislation passed in 2008. The law also gives customers five days to cancel a contract with a foreclosure consultant and requires the consultant to provide the customer with a copy of the contract, in any language the customer requests.

No real estate industry groups opposed the registration bill.

The California Association of Realtors opposes this year's proposals to prevent advance fees for loan modifications.